Petrol, Diesel prices may be hiked this week

NEW DELHI: State-run oil companies plan to raise petrol price by Rs 1 per litre and diesel by 50 paise a litre if they get the informal nod of oil minister Veerappa Moily, who has returned from week-long US trip on Wednesday.

Oil firms fear that political considerations could stall their plans of raising rates. Companies are free to charge market rates for petrol and raise diesel prices between 40 and 50 paise every month till it is aligned with global rates, but they want Moily's green signal to avoid being accused of disrupting the crucial budget session of the parliament, which will start next week, senior executives of Indian Oil, Bharat Petroleum and Hindustan Petroleum said.

Companies are suffering a revenue loss of more than Rs 1 a litre on petrol and more than Rs 10 on a litre of diesel because of northward movement of global crude oil prices, which was soared to a nine-month high close to $119 per barrel this month, executives said.

Indian Oil Chairman RS Butola said state oil marketing companies would "review" auto fuel rates this week. "We are following fortnightly (petrol and diesel pricing) cycle. That will be the time when we will again review prices," he told reporters after announcing company's financial results in the third quarter of current financial year. IOC's Q3 net profit jumped by 34 per cent at Rs 3,332 crore but it made a net loss of Rs 9,508 crore in nine months ended December 2012.

Butola said there was a decline in sale of bulk diesel, which is sold at market rates since Jan 17 after the government allowed companies to raise prices of subsidised diesel in a staggered manner and asked bulk buyers to pay market rates. Bulk diesel supply, which is sold directly by companies to consumers, constitutes 11 million tonnes of about 70 million tones diesel market.

Executives of IOC, BPCL and HPCL say that there is about 8-9 per cent decline in the sale of bulk diesel because buses of state transport corporations are refueling directly from pumps, where subsidized diesel is sold. "There is no law that would stop buses from taking fuel directly from retail outlets," Butola said.

The company has incurred a revenue loss of Rs 67,123 crore in nine months of the current financial year but the government has not fully compensated IOC for selling diesel, kerosene and cooking gas below market rates, Butola said.

"If we had received full compensation, our profit would have been higher by Rs 3,700 crore," he said.